By Laura Hains CPP, Operations Manager, Supply Chain Security & Consulting at Pinkerton
A security breakdown in the supply chain can lead to millions of pounds in lost revenue, compromised brand integrity and in some cases harm to consumers. Packaging is one of the fundamental factors of logistics activities for protecting goods from supplier to customer - so how best to ensure it does not become a weak link in the distribution network?
The Big Picture
Criminal activity and extreme weather events can be major threats to global supply chains because of the devastating ripple effect they have on suppliers and customers down the chain, whether it’s due to damaged packaging, truck companies prevented from delivering goods or businesses that have to close because their staff are unable to get to work.
However, while major incidents grab the biggest headlines, such as the tragic terrorist attacks in Paris and Brussels, counterfeiting and theft have a much greater impact on packaging efficiency in supply chains as incidents occur every day all over the world.
Commodities on the move are an attraction to criminals, who have no conscience regarding their status as life-saving drugs or lifestyle products. The counterfeiting and theft of goods is a major issue costing businesses hundreds of millions of pounds each year. Protection is a fundamental aspect of packaging in the supply chain, along with infrastructure, personnel and transportation security.
Counterfeiting can affect many different industries and can be particularly catastrophic for pharmaceuticals. To combat this menace there are tamper resistant packaging options that can help deter criminals from interfering with or stealing your goods.
Overt packaging measures such as barcodes, numbering, visible markings and other methods, for example tamper evident tape and bands that are company specific and thus costly to imitate, are always beneficial. Then there are covert techniques such as ultraviolet ink, holograms invisible to the naked eye, security threads and watermarks. The use of Radio Frequency Identification (RFID) tags passively embedded in the packaging and labels, or deployed as active tools, can also be invaluable in tracking the progress of high value and sensitive products like pharmaceuticals.
However, packaging security is just one major protocol to be examined in the supply chain. Only by thoroughly assessing your entire distribution network, either through self-assessment or by contracting a third party with expertise in the laws of world compliance, can all bases be covered.
Staff Screening Programmes
Comprehensive screening of packaging personnel is recommended to ensure that they have nothing in their background that could impact you in the future, while security audits on business partners will determine whether they meet the strict regulatory protocols of different countries, such as the Authorised Economic Operator (AEO) in Europe and C-TPAT 2.0 in the United States.
A number of companies have introduced Transportation Carrier Audits of their own, which are risk assessments based on the country and the location the goods will travel through. They work to specific guidelines depending on the product being delivered – a lifestyle product will not necessarily have the same security review as a prescription drug, for example.
However, this is not something you can just jump into. Regular self-assessment screening, and the willingness to review and take action when a packaging issue is identified can be a difficult procedure if you cannot be objective or don’t have someone who can dedicate the time necessary to give an unbiased, professional assessment.
There are security agencies that have the resources to effectively run audits designed to vet and screen personnel, work routines and the cyber and physical infrastructures along the entire transit network. Annual audits offer companies reassurances that best practice is being adhered to or will provide recommendations on how the security of packaging, storage and transit of goods can be improved and the risk of criminal interception minimised.
Vetting the Warehouse
Whatever the product, an audit will identify potential weaknesses in the supply chain, involving basic security measures such as people assessment, whether the warehouse has a totally intact perimeter fence in place, if the goods are stored properly, and if the packaging is secure and tamper resilient, CCTV operational and is access control installed.
Counterfeiters seek to capitalise on any weaknesses in the packaging supply chain which arise from manufacturer to end-user, and unfortunately packaging is central to the issue. An experienced third party provider can develop strong security protocols and SOPs (Standard Operating Procedures) for all areas that can help close the loopholes which the counterfeiters will happily exploit.
End To End Security
Criminals are becoming more sophisticated in their efforts to breach security measures and will take advantage of any chinks in the supply chain to achieve their goals. End-to-end security should be uppermost in the mind when devising a strategy to minimise the possibility of interference, tampering with the packaging or hijacking the goods. Secure, fit for purpose packaging can help deter intentional adulteration of a product by someone with access to the supply chain and ultimately prevent cargo theft.
A supply chain is only as strong as its weakest link. Failure to identify potential security issues in any of your physical, personnel, packaging and transportation systems, or those of your business partners, may open a chink in the armour. Packaging companies should be aware of all the avenues open to them to help protect themselves against counterfeiting and thus potential economic losses.
Laura Hains CPP serves as Operations Manager, Supply Chain Security & Consulting at Pinkerton, a global provider of corporate risk management services, including security consulting, investigations, executive protection, employment screening, protective intelligence and more.
More info: www.pinkerton.com